Wednesday, July 13, 2011

Alabama Dental Cartel Tried To Squash Competition

The Nonprofit Quarterly (NPQ) has been following a controversy in Alabama involving a battle between the non-profit Sarrell Dental Center and the state's for-profit, private "dental cartel" and its trade organization - the Alabama Dental Association (ALDA), see news reports here (4/13/2010), here (4/28/11) and here (7/9/2011). Here's some background:

From the clinic's website: "Sarrell Dental is a non-profit that treats the dental and optical needs of Alabama children ages 1-20 with Medicaid or ALLKids insurance. Sarrell Dental was founded in 2004 in Anniston, and since then Sarrell has grown to include 11 other offices and it operates a mobile dental bus which travels to schools and daycare centers throughout the state. Since 2006, Sarrell has grown to include optical services in 5 of its locations."

From NPQ: "The clinic gave away $400,000 in dental care to patients in 2010, never turns away a patient even if they are late or don’t have appointments, and, according to the CEO, “If they make it here, somehow, somewhere, even if we have to stay late, we’ll see them.”

The $10 million Sarrell clinic, now the largest dental provider in the state, is turning away job applicants and, according to the CEO, has “never had a complaint from a consumer,” unlike other Medicaid specialty practices. There’s no evidence – and no charges – that Sarrell is offering subpar services."

MP: So what's the problem? There really is none, unless you're a for-profit, private dentist and you don't welcome the competition from a non-profit organization. In that case, you exercise your political muscle and try to put your nonprofit competitor out of business, which the ALDA attempted to do, even though Sarrell was providing excellent, and sometime free, dental service to Alabama's under-served, poor children. Sarrell countered with an anti-trust lawsuit against Alabama's dental cartel for trying to engage in monopolistic, anti-competitive behavior.

Bottom Line: It now looks a compromise has been reached, signed by the governor, that will allow Sarrell to continue to operate under the supervision of the Alabama Board of Dental Examiners. In return, Sarrell will drop its antitrust lawsuit, although the FTC may still pursue action against the "dental cartel" for its attempts to put its non-profit competition out of business.

7 Comments:

I applaud Dr. Perry's string of posts concerning how state and local government are often the worst abusers of free enterprise.

Try starting up a push-cart business, selling recreational drugs, driving a jitney, hooking, barbering or any number of low-capital-to-entry businesses. The city or state will stop you.

Here in CA, a lawyer recently penned an editorial that too many people were passing the state bar, ergo too many lawyers, and not money for them.

While I detest lawyers, and would welcome their diminution in commercial affairs, the idea that the state should restrict entry to the profession through tightened licensing is particularly noxious. I wish there were so many lawyers that pay dropped to about $40 an hour, which is still more than what they are worth.

All of you braying for state rights and local control--mind what you wish for. You want to open up a hot-dog stand in your front yard? Too bad, and it ain't the feds that will shut you down.

Benjie, I agree about lawyer licensing but the reason for the states and localities to decide these issues is that one can always leave California or Alabama. Much harder to leave the US and its federal govt behind, though that can be done too. I'm pro-choice when it comes to abortion, but I don't deign to impose my views on every state and locality, which is why the federal govt shouldn't be allowed to impose Roe v Wade on every state. This is the same reason why medical marijuana is legal in California and some other states, but the federal govt somehow forces their contrary anti-drug law on everyone living in those states. The United States were intended to be laboratories for experiments on the best way to govern, but our overreaching federal govt, most recently with Obamacare, is simply getting in the way of those experiments with the overweening arrogance and flat-out stupidity of Obama, Frank, et al.

Why should I have to move just because my state or locality strips me of my economic liberties?

Besides, if you have established a business, family etc., moving is not a whim.

Should not we try protect liberties at the local and state levels?

Your view on abortion is clever, but unconvincing. You seem to be saying federal restrictions on my rights are terrible, but state and local abuses we can live with.

Actually, I would prefer a federal ukase that push-cart vending on public lands is legal in every state in the nation. I am not averse to the feds protecting my rights--the right to vote, for example, was protected by feds in many states.

In short, I find every level of government fully capable of abuses. Sometimes on behalf of public bureaucrats and programs, other times on behalf of prevailing business interests, and yet other times simply reinforcing biases (anti-gay sentiments for example, or that retailers must be closed on Sundays).

Benjie, people move all the time, and it is a lot easier to move to another US county or state than leave the country. The question isn't about whether liberty needs protection from state/local govt, it's whether one of the best ways to protect liberty is to move regulation from the federal level, where one-size-fits-all abortion and drug laws are forced on everyone in the US, to the state level, where each state's citizens can choose the level of liberty they want. I'm saying all restrictions are bad, but one of the best ways to avoid them is competition, which state regulators face much more of. And if you don't like your state/local laws, it is a lot easier to convince your neighbors to vote against them or move than it is to change federal law.

Of course you want a federal law for push-cart vending, you would be the kind of chump who blindly gives the feds that power, which they will then inevitably proceed to use against all of us, in other restrictive ways. The feds have done some good things, but if they broke the Constitution to do it, that actually ended up being much worse than the good they did, because of subsequent Congresses that used that precedent to stick their noses where they didn't belong. Of course every level of govt is capable of abuse, but I didn't have to deal with Romneycare just because the morons in Massachusetts voted for it, but I currently do have to deal with Obamacare, unless the Supremes overturn all of it.